Groupon Earnings So Poor It Offers Groupon on Own Stock

Groupon Inc. (NASDAQ: GRPN) reported fourth quarter and full year 2012 earnings after markets closed today. For the quarter, the daily deals company posted a diluted earnings per share (EPS) loss of $0.12 on revenues of $638.3 million. In the same period a year ago, the company reported an EPS loss of $0.12 on revenues of $492.16 million. Fourth-quarter results compare to the Thomson Reuters consensus estimates for EPS of $0.03 and $638.41 million in revenues.

For the full year Groupon posted an EPS loss of $0.10 on revenues of $2.33 billion. The consensus estimate called for EPS of $0.17 on revenues of $2.34 billion.

The company’s fourth quarter gross billings totaled $1.52 billion, below the $XX billion expected by some analysts. Gross billings are the dollar value of sales less taxes and estimated refunds. Gross billings rose 25% year-over-year in the quarter. An SEC inquiry into the methods Groupon uses to estimate future refunds diminishes the value of this metric in the eyes of investors and analysts.

The company’s CEO said:

Record billings growth this quarter is a clear signal that customers love Groupons. We will continue to invest in growth through 2013 as we see new opportunities to give our customers what they want.

The company said that it expects first quarter revenues of $560 to $610 million and operating income will range from a loss of $10 million to a profit of $10 million. The consensus estimate for the quarter calls for EPS of $0.06 on revenues of $650.29 million. That revenue estimate is killing shares after hours. And even if Groupon hits its high EPS estimate, it is still likely to miss the consensus EPS estimate.

For the full year Groupon said only that “operating income is expected to increase compared with 2012.” Full year 2012 operating income totaled $98.7 million.

Check your email tomorrow for an offer you can’t refuse on Groupon’s stock.

The company’s shares are down 21.1% in after-hours trading today, at $5.98. The current 52-week range is $2.60 to $20.50. The consensus target price for the shares was around $5.90 before today’s report.